eBay

A detailed Summary of eBay

eBay is the forerunner to the Internet classifieds. They have taken the traditional classified section of local, national, and international newspapers and trade magazines from every corner of the world and created an Internet version accessible for all to see and use on the World Wide Web. With the help of the Internet, they have brought markets together by offering millions of sellers the opportunity to sell their products to millions of potential buyers. With eBay's auction style selling, the buyers manipulate the pricing initially set by the seller and adjust the final selling price based on what the market will bear. For now, eBay has successfully branded its name and is the premier auctioneer of choice for millions of buyers and sellers. However, eBay is faced with many challenges as it struggles to define the strategies for the next phase of growth.

At year-end December 31, 2001, eBay's business has grown to $748.8 million in net revenues and net income to $90.4 million, representing a 74% annual growth. eBay currently has 42.4 million registered users, a level representing an 88% increase over the 22.5 million users reported at the end of the fourth quarter 2000. The incredibly rapid growth of th

Another issue that eBay faces in managing its business for profitability, growth, and dominance is its staffing and organizational structure. As the business experiences tremendous growth and expansion into new markets, growing through acquisitions, and offering additional services, it needs an informed and experienced staff to support corporate objectives. As the company takes on new ventures, the existing staff may not be knowledgeable enough to manage the business. The company must take steps to ensure it doesn't outgrow its current internal capabilities by hiring skilled managers capable of solving tomorrow's problems.

Another golden opportunity for eBay is to align itself with some strategic partners. For example, a preferred shipping company and a secure payment company. The most fundamental strategy in obtaining distinctive competencies would be to erect barriers to entry. One manner in which to do so would be to develop strategic partnerships that would firmly entrench eBay as the online auctioning model that no other company could copy. By reverse engineering the eBay experience, one can determine that payment and shipment are the two most important components of the eventual transaction. Therefore, it would be logical for eBay to form a partnership with a reliable shipping company and a secure payment (credit card) company.

eBay's current business strategy is to execute a strategy that balances increasing bottom-line returns with investments in future growth. Near term investments include international development and selective expansion, broadening and deepening category offerings, development of fixed price formats and other merchandising options. Additionally, improving thew user experience, ongoing development of eBay's next generation architecture and attracting new buyers and sellers to the eBay platform while building loyalty with existing eBay's community of users. With eBay's forecast of growth, they plan on achieving $3 billion in revenue by 2005, based on its estimated size of its

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Category: Technology